Colorado private fleet offers innovative driver-pay plan

By Ira Breskin -- Logistics Management, 3/1/2005

DENVER, Colo.— A private fleet operator is starting to attract national attention for a groundbreaking program that offers drivers incentives for timely, damage-free deliveries.

Denver-based American Furniture Warehouse, which owns 65 box trucks and operates two mega-stores generating more than $300 million in annual revenue, says many of its drivers now earn a significant portion of their salaries from a commission they receive for delivering furniture on time and in pristine condition. The company employs 140 non-union drivers.

The commission is based on a percentage of the selling price of the items being delivered, says General Manager Andrew Zuppa. Top home-delivery drivers are earning as much as $80,000 annually plus benefits. Most drivers, however, earn around $48,000 annually and receive health and dental coverage, he adds.

Home-delivery drivers and assistants generally work from early morning to mid-afternoon, five days a week. They are expected to deliver furniture to customers within a two-and-a-half hour window. Typically delivery teams call customers several stops beforehand to more precisely estimate the expected arrival time. "The customer chooses the day and we choose the time interval," explains Zuppa.

Delivery charges range from $39 to $129. For a $75 minimum charge, American Furniture will deliver an order at a specified time.

Although American Furniture has had the program in place for several years, the compensation program has garnered industry attention recently as motor carriers wrestle with ways to attract more young drivers into the field."This [payment scheme] is a very innovative concept…that could have applications in the household-goods moving industry," says Greg Fulton, president of the Colorado Motor Carriers' Association.

So far, the program is paying off. According to Zuppa, the company is seeing pay-for-performance compensation equate to increased customer satisfaction. He reports that the company is generating fewer damage claims than its competitors and boasts a lower driver-turnover rate.

"This is a large expense [for American Furniture] to swallow," says Zuppa. "But if you are willing to bite the bullet and pay well those who are taking care of your customers, it makes all the sense in the world."